Biomolecular engineering

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Biomolecular_engineering 

Biomolecular engineering is the application of engineering principles and practices to the purposeful manipulation of molecules of biological origin. Biomolecular engineers integrate knowledge of biological processes with the core knowledge of chemical engineering in order to focus on molecular level solutions to issues and problems in the life sciences related to the environment, agriculture, energy, industry, food production, biotechnology, biomanufacturing, and medicine.

Biomolecular engineers purposefully manipulate carbohydrates, proteins, nucleic acids and lipids within the framework of the relation between their structure (see: nucleic acid structure, carbohydrate chemistry, protein structure,), function (see: protein function) and properties and in relation to applicability to such areas as environmental remediation, crop and livestock production, biofuel cells and biomolecular diagnostics. The thermodynamics and kinetics of molecular recognition in enzymes, antibodies, DNA hybridization, bio-conjugation/bio-immobilization and bioseparations are studied. Attention is also given to the rudiments of engineered biomolecules in cell signaling, cell growth kinetics, biochemical pathway engineering and bioreactor engineering.

Timeline

History

During World War II, the need for large quantities of penicillin of acceptable quality brought together chemical engineers and microbiologists to focus on penicillin production. This created the right conditions to start a chain of reactions that lead to the creation of the field of biomolecular engineering. Biomolecular engineering was first defined in 1992 by the U.S. National Institutes of Health as research at the interface of chemical engineering and biology with an emphasis at the molecular level". Although first defined as research, biomolecular engineering has since become an academic discipline and a field of engineering practice. Herceptin, a humanized Mab for breast cancer treatment, became the first drug designed by a biomolecular engineering approach and was approved by the U.S. FDA. Also, Biomolecular Engineering was a former name of the journal New Biotechnology.

Future

Bio-inspired technologies of the future can help explain biomolecular engineering. Looking at the Moore's law "Prediction", in the future quantum and biology-based processors are "big" technologies. With the use of biomolecular engineering, the way our processors work can be manipulated in order to function in the same sense a biological cell work. Biomolecular engineering has the potential to become one of the most important scientific disciplines because of its advancements in the analyses of gene expression patterns as well as the purposeful manipulation of many important biomolecules to improve functionality. Research in this field may lead to new drug discoveries, improved therapies, and advancement in new bioprocess technology. With the increasing knowledge of biomolecules, the rate of finding new high-value molecules including but not limited to antibodies, enzymes, vaccines, and therapeutic peptides will continue to accelerate. Biomolecular engineering will produce new designs for therapeutic drugs and high-value biomolecules for treatment or prevention of cancers, genetic diseases, and other types of metabolic diseases. Also, there is anticipation of industrial enzymes that are engineered to have desirable properties for process improvement as well the manufacturing of high-value biomolecular products at a much lower production cost. Using recombinant technology, new antibiotics that are active against resistant strains will also be produced.

Basic biomolecules

Biomolecular engineering deals with the manipulation of many key biomolecules. These include, but are not limited to, proteins, carbohydrates, nucleic acids, and lipids. These molecules are the basic building blocks of life and by controlling, creating, and manipulating their form and function there are many new avenues and advantages available to society. Since every biomolecule is different, there are a number of techniques used to manipulate each one respectively.

Proteins

Main article: Protein engineering

Proteins are polymers that are made up of amino acid chains linked with peptide bonds. They have four distinct levels of structure: primary, secondary, tertiary, and quaternary. Primary structure refers to the amino acid backbone sequence. Secondary structure focuses on minor conformations that develop as a result of the hydrogen bonding between the amino acid chain. If most of the protein contains intermolecular hydrogen bonds it is said to be fibrillar, and the majority of its secondary structure will be beta sheets. However, if the majority of the orientation contains intramolecular hydrogen bonds, then the protein is referred to as globular and mostly consists of alpha helices. There are also conformations that consist of a mix of alpha helices and beta sheets as well as a beta helixes with an alpha sheets.

The tertiary structure of proteins deal with their folding process and how the overall molecule is arranged. Finally, a quaternary structure is a group of tertiary proteins coming together and binding. With all of these levels, proteins have a wide variety of places in which they can be manipulated and adjusted. Techniques are used to affect the amino acid sequence of the protein (site-directed mutagenesis), the folding and conformation of the protein, or the folding of a single tertiary protein within a quaternary protein matrix. Proteins that are the main focus of manipulation are typically enzymes. These are proteins that act as catalysts for biochemical reactions. By manipulating these catalysts, the reaction rates, products, and effects can be controlled. Enzymes and proteins are important to the biological field and research that there are specific divisions of engineering focusing only on proteins and enzymes.

Carbohydrates

Carbohydrates are another important biomolecule. These are polymers, called polysaccharides, which are made up of chains of simple sugars connected via glycosidic bonds. These monosaccharides consist of a five to six carbon ring that contains carbon, hydrogen, and oxygen - typically in a 1:2:1 ratio, respectively. Common monosaccharides are glucose, fructose, and ribose. When linked together monosaccharides can form disaccharides, oligosaccharides, and polysaccharides: the nomenclature is dependent on the number of monosaccharides linked together. Common dissacharides, two monosaccharides joined, are sucrose, maltose, and lactose. Important polysaccharides, links of many monosaccharides, are cellulose, starch, and chitin.

Cellulose is a polysaccharide made up of beta 1-4 linkages between repeat glucose monomers. It is the most abundant source of sugar in nature and is a major part of the paper industry. Starch is also a polysaccharide made up of glucose monomers; however, they are connected via an alpha 1-4 linkage instead of beta. Starches, particularly amylase, are important in many industries, including the paper, cosmetic, and food. Chitin is a derivation of cellulose, possessing an acetamide group instead of an –OH on one of its carbons. Acetimide group is deacetylated the polymer chain is then called chitosan. Both of these cellulose derivatives are a major source of research for the biomedical and food industries. They have been shown to assist with blood clotting, have antimicrobial properties, and dietary applications. A lot of engineering and research is focusing on the degree of deacetylation that provides the most effective result for specific applications.

Nucleic acids

Nucleic acids are macromolecules that consist of DNA and RNA which are biopolymers consisting of chains of biomolecules. These two molecules are the genetic code and template that make life possible. Manipulation of these molecules and structures causes major changes in function and expression of other macromolecules. Nucleosides are glycosylamines containing a nucleobase bound to either ribose or deoxyribose sugar via a beta-glycosidic linkage. The sequence of the bases determine the genetic code. Nucleotides are nucleosides that are phosphorylated by specific kinases via a phosphodiester bond. Nucleotides are the repeating structural units of nucleic acids. The nucleotides are made of a nitrogenous base, a pentose (ribose for RNA or deoxyribose for DNA), and three phosphate groups. See, Site-directed mutagenesis, recombinant DNA, and ELISAs.

Lipids

Lipids are biomolecules that are made up of glycerol derivatives bonded with fatty acid chains. Glycerol is a simple polyol that has a formula of C₃H₅(OH)₃. Fatty acids are long carbon chains that have a carboxylic acid group at the end. The carbon chains can be either saturated with hydrogen; every carbon bond is occupied by a hydrogen atom or a single bond to another carbon in the carbon chain, or they can be unsaturated; namely, there are double bonds between the carbon atoms in the chain. Common fatty acids include lauric acid, stearic acid, and oleic acid. The study and engineering of lipids typically focuses on the manipulation of lipid membranes and encapsulation. Cellular membranes and other biological membranes typically consist of a phospholipid bilayer membrane, or a derivative thereof. Along with the study of cellular membranes, lipids are also important molecules for energy storage. By utilizing encapsulation properties and thermodynamic characteristics, lipids become significant assets in structure and energy control when engineering molecules.

Of molecules

Recombinant DNA

Main article: Recombinant DNA

Recombinant DNA are DNA biomolecules that contain genetic sequences that are not native to the organism's genome. Using recombinant techniques, it is possible to insert, delete, or alter a DNA sequence precisely without depending on the location of restriction sites. Recombinant DNA is used for a wide range of applications.

Method

Creating recombinant DNA. After the plasmid is cleaved by restriction enzymes, ligases insert the foreign DNA fragments into the plasmid.

The traditional method for creating recombinant DNA typically involves the use of plasmids in the host bacteria. The plasmid contains a genetic sequence corresponding to the recognition site of a restriction endonuclease, such as EcoR1. After foreign DNA fragments, which have also been cut with the same restriction endonuclease, have been inserted into host cell, the restriction endonuclease gene is expressed by applying heat, or by introducing a biomolecule, such as arabinose. Upon expression, the enzyme will cleave the plasmid at its corresponding recognition site creating sticky ends on the plasmid. Ligases then joins the sticky ends to the corresponding sticky ends of the foreign DNA fragments creating a recombinant DNA plasmid.

Advances in genetic engineering have made the modification of genes in microbes quite efficient allowing constructs to be made in about a weeks worth of time. It has also made it possible to modify the organism's genome itself. Specifically, use of the genes from the bacteriophage lambda are used in recombination. This mechanism, known as recombineering, utilizes the three proteins Exo, Beta, and Gam, which are created by the genes exo, bet, and gam respectively. Exo is a double stranded DNA exonuclease with 5' to 3' activity. It cuts the double stranded DNA leaving 3' overhangs. Beta is a protein that binds to single stranded DNA and assists homologous recombination by promoting annealing between the homology regions of the inserted DNA and the chromosomal DNA. Gam functions to protect the DNA insert from being destroyed by native nucleases within the cell.

Applications

Recombinant DNA can be engineered for a wide variety of purposes. The techniques utilized allow for specific modification of genes making it possible to modify any biomolecule. It can be engineered for laboratory purposes, where it can be used to analyze genes in a given organism. In the pharmaceutical industry, proteins can be modified using recombination techniques. Some of these proteins include human insulin. Recombinant insulin is synthesized by inserting the human insulin gene into E. coli, which then produces insulin for human use. Other proteins, such as human growth hormone, factor VIII, and hepatitis B vaccine are produced using similar means. Recombinant DNA can also be used for diagnostic methods involving the use of the ELISA method. This makes it possible to engineer antigens, as well as the enzymes attached, to recognize different substrates or be modified for bioimmobilization. Recombinant DNA is also responsible for many products found in the agricultural industry. Genetically modified food, such as golden rice, has been engineered to have increased production of vitamin A for use in societies and cultures where dietary vitamin A is scarce. Other properties that have been engineered into crops include herbicide-resistance and insect-resistance.

Site-directed mutagenesis

Site-directed mutagenesis is a technique that has been around since the 1970s. The early days of research in this field yielded discoveries about the potential of certain chemicals such as bisulfite and aminopurine to change certain bases in a gene. This research continued, and other processes were developed to create certain nucleotide sequences on a gene, such as the use of restriction enzymes to fragment certain viral strands and use them as primers for bacterial plasmids. The modern method, developed by Michael Smith in 1978, uses an oligonucleotide that is complementary to a bacterial plasmid with a single base pair mismatch or a series of mismatches.

General procedure

Site directed mutagenesis is a valuable technique that allows for the replacement of a single base in an oligonucleotide or gene. The basics of this technique involve the preparation of a primer that will be a complementary strand to a wild type bacterial plasmid. This primer will have a base pair mismatch at the site where the replacement is desired. The primer must also be long enough such that the primer will anneal to the wild type plasmid. After the primer anneals, a DNA polymerase will complete the primer. When the bacterial plasmid is replicated, the mutated strand will be replicated as well. The same technique can be used to create a gene insertion or deletion. Often, an antibiotic resistant gene is inserted along with the modification of interest and the bacteria are cultured on an antibiotic medium. The bacteria that were not successfully mutated will not survive on this medium, and the mutated bacteria can easily be cultured.

This animation shows the basic steps of site directed mutagenesis, where X-Y is the desired base pair replacement of T-A.

Applications

Site-directed mutagenesis can be helpful for many different reasons. A single base-pair replacement will change the codon, potentially replacing an amino acid in a protein. Mutagenesis can help determine the function of proteins and the roles of specific amino acids. If an amino acid near the active site is mutated, the kinetic parameters may change drastically, or the enzyme might behave differently. Another application of site-directed mutagenesis is exchanging an amino acid residue far from the active site with a lysine residue or cysteine residue. These amino acids make it easier to covalently bond the enzyme to a solid surface, which allows for enzyme re-use and the use of enzymes in continuous processes. Sometimes, amino acids with non-natural functional groups (such as an aldehyde introduced through an aldehyde tag) are added to proteins. These additions may be for ease of bioconjugation or to study the effects of amino acid changes on the form and function of the proteins. One example of how mutagenesis is used is found in the coupling of site-directed mutagenesis and PCR to reduce interleukin-6 activity in cancerous cells. In another example, Bacillus subtilis is used in site-directed mutagenesis, to secrete the enzyme subtilisin through the cell wall. Biomolecular engineers can purposely manipulate this gene to essentially make the cell a factory for producing whatever protein the insertion in the gene codes.

Bio-immobilization and bio-conjugation

Bio-immobilization and bio-conjugation is the purposeful manipulation of a biomolecule's mobility by chemical or physical means to obtain a desired property. Immobilization of biomolecules allows exploiting characteristics of the molecule under controlled environments. For example, the immobilization of glucose oxidase on calcium alginate gel beads can be used in a bioreactor. The resulting product will not need purification to remove the enzyme because it will remain linked to the beads in the column. Examples of types of biomolecules that are immobilized are enzymes, organelles, and complete cells. Biomolecules can be immobilized using a range of techniques. The most popular are physical entrapment, adsorption, and covalent modification.

• Physical entrapment - the use of a polymer to contain the biomolecule in a matrix without chemical modification. Entrapment can be between lattices of polymer, known as gel entrapment, or within micro-cavities of synthetic fibers, known as fiber entrapment. Examples include entrapment of enzymes such as glucose oxidase in gel column for use as a bioreactor. Important characteristic with entrapment is biocatalyst remains structurally unchanged, but creates large diffusion barriers for substrates.
• Adsorption- immobilization of biomolecules due to interaction between the biomolecule and groups on support. Can be physical adsorption, ionic bonding, or metal binding chelation. Such techniques can be performed under mild conditions and relatively simple, although the linkages are highly dependent upon pH, solvent and temperature. Examples include enzyme-linked immunosorbent assays.
• Covalent modification- involves chemical reactions between certain functional groups and matrix. This method forms stable complex between biomolecule and matrix and is suited for mass production. Due to the formation of chemical bond to functional groups, loss of activity can occur. Examples of chemistries used are DCC coupling PDC coupling and EDC/NHS coupling, all of which take advantage of the reactive amines on the biomolecule's surface.

Because immobilization restricts the biomolecule, care must be given to ensure that functionality is not entirely lost. Variables to consider are pH, temperature, solvent choice, ionic strength, orientation of active sites due to conjugation. For enzymes, the conjugation will lower the kinetic rate due to a change in the 3-dimensional structure, so care must be taken to ensure functionality is not lost. Bio-immobilization is used in technologies such as diagnostic bioassays, biosensors, ELISA, and bioseparations. Interleukin (IL-6) can also be bioimmobilized on biosensors. The ability to observe these changes in IL-6 levels is important in diagnosing an illness. A cancer patient will have elevated IL-6 level and monitoring those levels will allow the physician to watch the disease progress. A direct immobilization of IL-6 on the surface of a biosensor offers a fast alternative to ELISA.

Polymerase chain reaction

Main article: Polymerase chain reaction

Polymerase chain reaction. There are three main steps involved in PCR. In the first step, the double stranded DNA strands are "melted" or denatured forming single stranded DNA. Next, primers, which have been designed to target a specific gene sequence on the DNA, anneal to the single stranded DNA. Lastly, DNA polymerase synthesizes a new DNA strand complementary to the original DNA. These three steps are repeated multiple times until the desired number of copies are made.

The polymerase chain reaction (PCR) is a scientific technique that is used to replicate a piece of a DNA molecule by several orders of magnitude. PCR implements a cycle of repeated heated and cooling known as thermal cycling along with the addition of DNA primers and DNA polymerases to selectively replicate the DNA fragment of interest. The technique was developed by Kary Mullis in 1983 while working for the Cetus Corporation. Mullis would go on to win the Nobel Prize in Chemistry in 1993 as a result of the impact that PCR had in many areas such as DNA cloning, DNA sequencing, and gene analysis.

Biomolecular engineering techniques involved in PCR

A number of biomolecular engineering strategies have played a very important role in the development and practice of PCR. For instance a crucial step in ensuring the accurate replication of the desired DNA fragment is the creation of the correct DNA primer. The most common method of primer synthesis is by the phosphoramidite method. This method includes the biomolecular engineering of a number of molecules to attain the desired primer sequence. The most prominent biomolecular engineering technique seen in this primer design method is the initial bioimmobilization of a nucleotide to a solid support. This step is commonly done via the formation of a covalent bond between the 3'-hydroxy group of the first nucleotide of the primer and the solid support material.

Furthermore, as the DNA primer is created certain functional groups of nucleotides to be added to the growing primer require blocking to prevent undesired side reactions. This blocking of functional groups as well as the subsequent de-blocking of the groups, coupling of subsequent nucleotides, and eventual cleaving from the solid support are all methods of manipulation of biomolecules that can be attributed to biomolecular engineering. The increase in interleukin levels is directly proportional to the increased death rate in breast cancer patients. PCR paired with Western blotting and ELISA help define the relationship between cancer cells and IL-6.

Enzyme-linked immunosorbent assay (ELISA)

Main article: ELISA

Enzyme-linked immunosorbent assay is an assay that utilizes the principle of antibody-antigen recognition to test for the presence of certain substances. The three main types of ELISA tests which are indirect ELISA, sandwich ELISA, and competitive ELISA all rely on the fact that antibodies have an affinity for only one specific antigen. Furthermore, these antigens or antibodies can be attached to enzymes which can react to create a colorimetric result indicating the presence of the antibody or antigen of interest. Enzyme linked immunosorbent assays are used most commonly as diagnostic tests to detect HIV antibodies in blood samples to test for HIV, human chorionic gonadotropin molecules in urine to indicate pregnancy, and Mycobacterium tuberculosis antibodies in blood to test patients for tuberculosis. Furthermore, ELISA is also widely used as a toxicology screen to test people's serum for the presence of illegal drugs.

Techniques involved in ELISA

Although there are three different types of solid state enzyme-linked immunosorbent assays, all three types begin with the bioimmobilization of either an antibody or antigen to a surface. This bioimmobilization is the first instance of biomolecular engineering that can be seen in ELISA implementation. This step can be performed in a number of ways including a covalent linkage to a surface which may be coated with protein or another substance. The bioimmobilization can also be performed via hydrophobic interactions between the molecule and the surface. Because there are many different types of ELISAs used for many different purposes the biomolecular engineering that this step requires varies depending on the specific purpose of the ELISA.

Another biomolecular engineering technique that is used in ELISA development is the bioconjugation of an enzyme to either an antibody or antigen depending on the type of ELISA. There is much to consider in this enzyme bioconjugation such as avoiding interference with the active site of the enzyme as well as the antibody binding site in the case that the antibody is conjugated with enzyme. This bioconjugation is commonly performed by creating crosslinks between the two molecules of interest and can require a wide variety of different reagents depending on the nature of the specific molecules.

Interleukin (IL-6) is a signaling protein that has been known to be present during an immune response. The use of the sandwich type ELISA quantifies the presence of this cytokine within spinal fluid or bone marrow samples.

Applications and fields

In industry

Graph showing number of biotech companies per country

Graph showing percentages of biotech firms by application

Biomolecular engineering is an extensive discipline with applications in many different industries and fields. As such, it is difficult to pinpoint a general perspective on the Biomolecular engineering profession. The biotechnology industry, however, provides an adequate representation. The biotechnology industry, or biotech industry, encompasses all firms that use biotechnology to produce goods or services or to perform biotechnology research and development. In this way, it encompasses many of the industrial applications of the biomolecular engineering discipline. By examination of the biotech industry, it can be gathered that the principal leader of the industry is the United States, followed by France and Spain. It is also true that the focus of the biotechnology industry and the application of biomolecular engineering is primarily clinical and medical. People are willing to pay for good health, so most of the money directed towards the biotech industry stays in health-related ventures.

Scale-up

Scaling up a process involves using data from an experimental-scale operation (model or pilot plant) for the design of a large (scaled-up) unit, of commercial size. Scaling up is a crucial part of commercializing a process. For example, insulin produced by genetically modified Escherichia coli bacteria was initialized on a lab-scale, but to be made commercially viable had to be scaled up to an industrial level. In order to achieve this scale-up a lot of lab data had to be used to design commercial sized units. For example, one of the steps in insulin production involves the crystallization of high purity glargin insulin. In order to achieve this process on a large scale we want to keep the Power/Volume ratio of both the lab-scale and large-scale crystallizers the same in order to achieve homogeneous mixing. We also assume the lab-scale crystallizer has geometric similarity to the large-scale crystallizer. Therefore,

P/V α N_i³d_i³
where d_i= crystallizer impeller diameter
N_i= impeller rotation rate

Related industries

Bioengineering

Main article: Biological engineering

A broad term encompassing all engineering applied to the life sciences. This field of study utilizes the principles of biology along with engineering principles to create marketable products. Some bioengineering applications include:

• Biomimetics - The study and development of synthetic systems that mimic the form and function of natural biologically produced substances and processes.
• Bioprocess engineering - The study and development of process equipment and optimization that aids in the production of many products such as food and pharmaceuticals.
• Industrial microbiology - The implementation of microorganisms in the production of industrial products such as food and antibiotics. Another common application of industrial microbiology is the treatment of wastewater in chemical plants via utilization of certain microorganisms.

Biochemistry

Main article: Biochemistry

Biochemistry is the study of chemical processes in living organisms, including, but not limited to, living matter. Biochemical processes govern all living organisms and living processes and the field of biochemistry seeks to understand and manipulate these processes.

Biochemical engineering

Main article: Biochemical engineering

• Biocatalysis – Chemical transformations using enzymes.
• Bioseparations – Separation of biologically active molecules.
• Thermodynamics and Kinetics (chemistry) – Analysis of reactions involving cell growth and biochemicals.
• Bioreactor design and analysis – Design of reactors for performing biochemical transformations.

Biotechnology

Main article: Biotechnology

• Biomaterials – Design, synthesis and production of new materials to support cells and tissues.
• Genetic engineering – Purposeful manipulation of the genomes of organisms to produce new phenotypic traits.
• Bioelectronics, Biosensor and Biochip – Engineered devices and systems to measure, monitor and control biological processes.
• Bioprocess engineering – Design and maintenance of cell-based and enzyme-based processes for the production of fine chemicals and pharmaceuticals.

Bioelectrical engineering

Main article: Bioelectric

Bioelectrical engineering involves the electrical fields generated by living cells or organisms. Examples include the electric potential developed between muscles or nerves of the body. This discipline requires knowledge in the fields of electricity and biology to understand and utilize these concepts to improve or better current bioprocesses or technology.

• Bioelectrochemistry - Chemistry concerned with electron/proton transport throughout the cell
• Bioelectronics - Field of research coupling biology and electronics

Biomedical engineering

Main article: Biomedical engineering

Biomedical engineering is a sub category of bioengineering that uses many of the same principles but focuses more on the medical applications of the various engineering developments. Some applications of biomedical engineering include:

• Biomaterials - Design of new materials for implantation in the human body and analysis of their effect on the body.
• Cellular engineering – Design of new cells using recombinant DNA and development of procedures to allow normal cells to adhere to artificial implanted biomaterials
• Tissue engineering – Design of new tissues from the basic biological building blocks to form new tissues
• Artificial organs – Application of tissue engineering to whole organs
• Medical imaging – Imaging of tissues using CAT scan, MRI, ultrasound, x-ray or other technologies
• Medical Optics and Lasers – Application of lasers to medical diagnosis and treatment
• Rehabilitation engineering – Design of devices and systems used to aid disabled people
• Man-machine interfacing - Control of surgical robots and remote diagnostic and therapeutic systems using eye tracking, voice recognition and muscle and brain wave controls
• Human factors and ergonomics – Design of systems to improve human performance in a wide range of applications

Chemical engineering

Main article: Chemical engineering

Chemical engineering is the processing of raw materials into chemical products. It involves preparation of raw materials to produce reactants, the chemical reaction of these reactants under controlled conditions, the separation of products, the recycle of byproducts, and the disposal of wastes. Each step involves certain basic building blocks called "unit operations," such as extraction, filtration, and distillation. These unit operations are found in all chemical processes. Biomolecular engineering is a subset of Chemical Engineering that applies these same principles to the processing of chemical substances made by living organisms.

Education and programs

Newly developed and offered undergraduate programs across the United States, often coupled to the chemical engineering program, allow students to achieve a B.S. degree. According to ABET (Accreditation Board for Engineering and Technology), biomolecular engineering curricula "must provide thorough grounding in the basic sciences including chemistry, physics, and biology, with some content at an advanced level... [and] engineering application of these basic sciences to design, analysis, and control, of chemical, physical, and/or biological processes." Common curricula consist of major engineering courses including transport, thermodynamics, separations, and kinetics, with additions of life sciences courses including biology and biochemistry, and including specialized biomolecular courses focusing on cell biology, nano- and biotechnology, biopolymers, etc.

Market economy

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Market_economy 

Pike Place Market, Seattle, Washington, United States, 1968

A market economy is an economic system in which the decisions regarding investment, production, and distribution to the consumers are guided by the price signals created by the forces of supply and demand. The major characteristic of a market economy is the existence of factor markets that play a dominant role in the allocation of capital and the factors of production.

Market economies range from minimally regulated to highly regulated systems. On the least regulated side, free market and laissez-faire systems are where state activity is restricted to providing public goods and services and safeguarding private ownership, while interventionist economies are where the government plays an active role in correcting market failures and promoting social welfare. State-directed or dirigist economies are those where the state plays a directive role in guiding the overall development of the market through industrial policies or indicative planning—which guides yet does not substitute the market for economic planning—a form sometimes referred to as a mixed economy. [DJS-I question this statement]

Market economies are contrasted with planned economies where investment and production decisions are embodied in an integrated economy-wide economic plan. In a centrally planned economy, economic planning is the principal allocation mechanism between firms rather than markets, with the economy's means of production being owned and operated by a single organizational body.

Characteristics

Property rights

For market economies to function efficiently, governments must establish clearly defined and enforceable property rights for assets and capital goods. However, property rights do not specifically mean private property rights and market economies do not logically presuppose the existence of private ownership of the means of production. Market economies can and often do include various types of cooperatives or autonomous state-owned enterprises that acquire capital goods and raw materials in capital markets. These enterprises utilize a market-determined free price system to allocate capital goods and labor. In addition, there are many variations of market socialism where the majority of capital assets are socially owned with markets allocating resources between socially owned firms. These models range from systems based on employee-owned enterprises based on self-management to a combination of public ownership of the means of production with factor markets.

Supply and demand

Supply and demand work in tandem. The economic theory is that supply slopes upwards as people buy more and demand drops as prices rise and people buy less.

Market economies rely upon a price system to signal market actors to adjust production and investment. Price formation relies on the interaction of supply and demand to reach or approximate an equilibrium where the unit price for a particular good or service is at a point where the quantity demanded equals the quantity supplied.

The price data point where the supply and demand lines intersect is called the market-clearing price.

Market economy supply and demand

Governments can intervene by establishing price ceilings or price floors in specific markets (such as minimum wage laws in the labor market), or use fiscal policy to discourage certain consumer behavior or to address market externalities generated by certain transactions (Pigovian taxes). Different perspectives exist on the role of government in both regulating and guiding market economies and in addressing social inequalities produced by markets. Fundamentally, a market economy requires that a price system affected by supply and demand exists as the primary mechanism for allocating resources irrespective of the level of regulation.

Capitalism

Main article: Capitalism

Capitalism is an economic system where the means of production are largely or entirely privately owned and operated for a profit, structured on the process of capital accumulation. In general, in capitalist systems investment, distribution, income and prices are determined by markets, whether regulated or unregulated.

There are different variations of capitalism with different relationships to markets. In laissez-faire and free-market variations of capitalism, markets are utilized most extensively with minimal or no state intervention and minimal or no regulation over prices and the supply of goods and services. In interventionist, welfare capitalism and mixed economies, markets continue to play a dominant role, but they are regulated to some extent by the government in order to correct market failures or to promote social welfare. In state capitalist systems, markets are relied upon the least, with the state relying heavily on either indicative planning and/or state-owned enterprises to accumulate capital.

Capitalism has been dominant in the Western world since the end of mercantilism. However, it is argued that the term mixed economies more precisely describes most contemporary economies due to their containing both private-owned and state-owned enterprises. In capitalism, prices determine the demand-supply scale. Higher demand for certain goods and services leads to higher prices and lower demand for certain goods lead to lower prices, in relation to supply.

Free-market capitalism

See also: Free market

A capitalist free-market economy is an economic system where prices for goods and services are set freely by the forces of supply and demand and are expected by its supporters to reach their point of equilibrium without intervention by government policy. It typically entails support for highly competitive markets, private ownership of productive enterprises. Laissez-faire is a more extensive form of free-market economy where the role of the state is limited to protecting property rights and enforcing contracts.

Laissez-faire

Main article: Laissez-faire

See also: Economic liberalism

Laissez-faire is synonymous with what was referred to as strict free-market economy during the early and mid-19th century as a classical liberal ideal to achieve. It is generally understood that the necessary components for the functioning of an idealized free market include the complete absence of government regulation, subsidies, artificial price pressures and government-granted monopolies (usually classified as coercive monopoly by free market advocates) and no taxes or tariffs other than what is necessary for the government to provide protection from coercion and theft, maintaining peace and property rights and providing for basic public goods. Right-libertarian advocates of anarcho-capitalism see the state as morally illegitimate and economically unnecessary and destructive. Although laissez-faire has been commonly associated with capitalism, there is a similar left-wing laissez-faire system called free-market anarchism, also known as free-market anti-capitalism and free-market socialism to distinguish it from laissez-faire capitalism. Thus, critics of laissez-faire as commonly understood argues that a truly laissez-faire system would be anti-capitalist and socialist.

Welfare capitalism

Main article: Welfare capitalism

Welfare capitalism is a capitalist economy that includes public policies favoring extensive provisions for social welfare services. The economic mechanism involves a free market and the predominance of privately owned enterprises in the economy, but public provision of universal welfare services aimed at enhancing individual autonomy and maximizing equality. Examples of contemporary welfare capitalism include the Nordic model of capitalism predominant in Northern Europe.

Regional models

Anglo-Saxon model

Main article: Anglo-Saxon model

Anglo-Saxon capitalism is the form of capitalism predominant in Anglophone countries and typified by the economy of the United States. It is contrasted with European models of capitalism such as the continental social market model and the Nordic model. Anglo-Saxon capitalism refers to a macroeconomic policy regime and capital market structure common to the Anglophone economies. Among these characteristics are low rates of taxation, more open international markets, lower labor market protections and a less generous welfare state eschewing collective bargaining schemes found in the continental and northern European models of capitalism.

East Asian model

Main article: East Asian model

The East Asian model of capitalism involves a strong role for state investment and in some instances involves state-owned enterprises. The state takes an active role in promoting economic development through subsidies, the facilitation of "national champions" and an export-based model of growth. The actual practice of this model varies by country. This designation has been applied to the economies of China, Japan, Singapore, South Korea, Vietnam, and sometimes to those of Hong Kong and Taiwan.

A related concept in political science is the developmental state.

Social market economy

Main article: Social market economy

The social market economy was implemented by Alfred Müller-Armack and Ludwig Erhard after World War II in West Germany. The social market economic model, sometimes called Rhine capitalism, is based upon the idea of realizing the benefits of a free-market economy, especially economic performance and high supply of goods while avoiding disadvantages such as market failure, destructive competition, concentration of economic power and the socially harmful effects of market processes. The aim of the social market economy is to realize greatest prosperity combined with best possible social security. One difference from the free market economy is that the state is not passive, but instead takes active regulatory measures. The social policy objectives include employment, housing and education policies, as well as a socio-politically motivated balancing of the distribution of income growth. Characteristics of social market economies are a strong competition policy and a contractionary monetary policy. The philosophical background is neoliberalism or ordoliberalism.

Socialism

Main article: Market socialism

Market socialism is a form of market economy where the means of production are socially owned. In a market socialist economy, firms operate according to the rules of supply and demand and operate to maximize profit; the principal difference between market socialism and capitalism being that the profits accrue either directly to the workers of the company or society as a whole as opposed to private owners.

The distinguishing feature between non-market socialism and market socialism is the existence of a market for factors of production and the criteria of profitability for enterprises. Profits derived from publicly owned enterprises can variously be used to reinvest in further production, to directly finance government and social services, or be distributed to the public at large through a social dividend or basic income system.

Advocates of market socialism such as Jaroslav Vaněk argue that genuinely free markets are not possible under conditions of private ownership of productive property. Instead, he contends that the class differences and inequalities in income and power that result from private ownership enable the interests of the dominant class to skew the market to their favor, either in the form of monopoly and market power, or by utilizing their wealth and resources to legislate government policies that benefit their specific business interests. Additionally, Vaněk states that workers in a socialist economy based on cooperative and self-managed enterprises have stronger incentives to maximize productivity because they would receive a share of the profits (based on the overall performance of their enterprise) in addition to receiving their fixed wage or salary. The stronger incentives to maximize productivity that he conceives as possible in a socialist economy based on cooperative and self-managed enterprises might be accomplished in a free-market economy if cooperatives were the norm as envisioned by various thinkers including Louis O. Kelso and James S. Albus.

Models of market socialism

Market socialism traces its roots to classical economics and the works of Adam Smith, the Ricardian socialists and mutualist philosophers.

In the 1930s, the economists Oskar Lange and Abba Lerner developed a model of socialism that posited that a public body (dubbed the Central Planning Board) could set prices through a trial-and-error approach until they equaled the marginal cost of production in order to achieve perfect competition and pareto optimality. In this model of socialism, firms would be state-owned and managed by their employees and the profits would be disbursed among the population in a social dividend. This model came to be referred to as market socialism because it involved the use of money, a price system and simulated capital markets, all of which were absent from traditional non-market socialism.

A more contemporary model of market socialism is that put forth by the American economist John Roemer, referred to as economic democracy. In this model, social ownership is achieved through public ownership of equity in a market economy. A Bureau of Public Ownership would own controlling shares in publicly listed firms, so that the profits generated would be used for public finance and the provision of a basic income.

Some anarchists and libertarian socialists promote a form of market socialism in which enterprises are owned and managed cooperatively by their workforce so that the profits directly remunerate the employee-owners. These cooperative enterprises would compete with each other in the same way private companies compete with each other in a capitalist market. The first major elaboration of this type of market socialism was made by Pierre-Joseph Proudhon and was called mutualism.

Self-managed market socialism was promoted in Yugoslavia by economists Branko Horvat and Jaroslav Vaněk. In the self-managed model of socialism, firms would be directly owned by their employees and the management board would be elected by employees. These cooperative firms would compete with each other in a market for both capital goods and for selling consumer goods.

Socialist market economy

Following the 1978 reforms, China developed what it calls a socialist market economy in which most of the economy is under state ownership, with the state enterprises organized as joint-stock companies with various government agencies owning controlling shares through a shareholder system. Prices are set by a largely free-price system and the state-owned enterprises are not subjected to micromanagement by a government planning agency. A similar system called socialist-oriented market economy has emerged in Vietnam following the Đổi Mới reforms in 1986. This system is frequently characterized as state capitalism instead of market socialism because there is no meaningful degree of employee self-management in firms, because the state enterprises retain their profits instead of distributing them to the workforce or government and because many function as de facto private enterprises. The profits neither finance a social dividend to benefit the population at large, nor do they accrue to their employees. In China, this economic model is presented as a preliminary stage of socialism to explain the dominance of capitalistic management practices and forms of enterprise organization in both the state and non-state sectors.

In religion

A wide range of philosophers and theologians have linked market economies to concepts from monotheistic religions. Michael Novak described capitalism as being closely related to Catholicism, but Max Weber drew a connection between capitalism and Protestantism. The economist Jeffrey Sachs has stated that his work was inspired by the healing characteristics of Judaism. Chief Rabbi Lord Sacks of the United Synagogue draws a correlation between modern capitalism and the Jewish image of the Golden Calf.

Christianity

In the Christian faith, the liberation theology movement advocated involving the church in labor market capitalism. Many priests and nuns integrated themselves into labor organizations while others moved into the slums to live among the poor. The Holy Trinity was interpreted as a call for social equality and the elimination of poverty. However, the Pope John Paul II was highly active in his criticism of liberation theology. He was particularly concerned about the increased fusion between Christianity and Marxism. He closed Catholic institutions that taught liberation theology and dismissed some of its activists from the church.

Buddhism

The Buddhist approach to the market economy was dealt with in E. F. Schumacher's 1966 essay "Buddhist Economics". Schumacher asserted that a market economy guided by Buddhist principles would more successfully meet the needs of its people. He emphasized the importance of pursuing occupations that adhered to Buddhist teachings. The essay would later become required reading for a course that Clair Brown offered at University of California, Berkeley.

Criticism

The economist Joseph Stiglitz argues that markets suffer from informational inefficiency and the presumed efficiency of markets stems from the faulty assumptions of neoclassical welfare economics, particularly the assumption of perfect and costless information and related incentive problems. Neoclassical economics assumes static equilibrium and efficient markets require that there be no non-convexities, even though nonconvexities are pervasive in modern economies. Stiglitz's critique applies to both existing models of capitalism and to hypothetical models of market socialism. However, Stiglitz does not advocate replacing markets, but instead states that there is a significant role for government intervention to boost the efficiency of markets and to address the pervasive market failures that exist in contemporary economies. A fair market economy is in fact a martingale or a Brownian motion model and for a participant competitor in such a model there is no more than 50% of success chances at any given moment. Due to the fractal nature of any fair market and being market participants subject to the law of competition which impose reinvesting an increasing part of profits, the mean statistical chance of bankruptcy within the half life of any participant is also 50% and 100% whether an infinite sample of time is considered.

Robin Hahnel and Michael Albert claim that "markets inherently produce class division". Albert states that even if everyone started out with a balanced job complex (doing a mix of roles of varying creativity, responsibility and empowerment) in a market economy, class divisions would arise, arguing:

Without taking the argument that far, it is evident that in a market system with uneven distribution of empowering work, such as Economic Democracy, some workers will be more able than others to capture the benefits of economic gain. For example, if one worker designs cars and another builds them, the designer will use his cognitive skills more frequently than the builder. In the long term, the designer will become more adept at conceptual work than the builder, giving the former greater bargaining power in a firm over the distribution of income. A conceptual worker who is not satisfied with his income can threaten to work for a company that will pay him more. The effect is a class division between conceptual and manual laborers, and ultimately managers and workers, and a de facto labor market for conceptual workers.

David McNally argues in the Marxist tradition that the logic of the market inherently produces inequitable outcomes and leads to unequal exchanges, arguing that Adam Smith's moral intent and moral philosophy espousing equal exchange was undermined by the practice of the free markets he championed. The development of the market economy involved coercion, exploitation and violence that Smith's moral philosophy could not countenance. McNally also criticizes market socialists for believing in the possibility of fair markets based on equal exchanges to be achieved by purging parasitical elements from the market economy such as private ownership of the means of production. McNally argues that market socialism is an oxymoron when socialism is defined as an end to wage-based labor.

The role of supply and demand in a market economy

Supply and demand play an instrumental role in driving market economies by setting both prices and quantities traded in markets. Supply is defined as any increase in price leading to an increase in supply from producers; demand on the other hand means any drop leads to an increase in desired quantities from consumers; these two laws meet at equilibrium when provided quantity equals quantity demanded - known as equilibrium price/quantity equilibrium point. Prices play an extremely vital role in market economies by providing important information about commodity and service availability. When there is strong demand but limited supply, prices increase, signaling to producers that there may be opportunities to increase profits by producing more of that product. Conversely, when there is low demand with increased supply then prices reduce, showing manufacturers they must either reduce output or find methods of cutting costs in order to stay competitive and remain profitable.

External factors, including shifting technological standards, new government laws, and natural catastrophes can have a substantial impact on supply and demand. Technological innovations may increase supply, while laws issued by governments could decrease it or even demand. Natural disasters have the ability to severely disrupt supply chains, creating shortages of key items that increase costs while simultaneously decreasing demand. Supply and demand play an indispensable role in any market economy by ensuring prices reflect market forces accurately, adapting accordingly as conditions shift between supply and demand situations, while producers adjust production according to price signals from consumers, fulfilling customers' requests while giving individuals freedom in making purchasing choices based on personal preferences or financial constraints. Thus supply and demand play an instrumental part in shaping and stabilizing economies governed by market forces.

Sustainable market economy

A sustainable market economy seeks to balance economic expansion and environmental preservation. It acknowledges that sustainable environmental protection and resource management are essential for long-term economic growth. To achieve this balance, implementing sustainable practices across sectors, such as lowering carbon emissions, developing renewable energy sources, and putting circular economy ideas into practice. Tax incentives, carbon trading programs, and environmental requirements are just a few ways government rules and policies encourage enterprises to adopt sustainable practices.

At the same time, consumer demand for eco-friendly goods and services and understanding of these issues may influence market dynamics to favour more sustainable options. A sustainable market economy may encourage innovation, provide green employment, and guarantee the welfare of future generations by incorporating environmental factors into economic decision-making. Prioritizing sustainability while preserving economic development needs cooperation between governments, corporations, and people.